Like overcrowded bathrooms and kiosks with four-dollar bottles of water, duty-free shops — where buyers can save up to 50 percent on goods — are a big part of the airport experience. But you might be surprised to learn just how big. Duty free is a $62-billion-a-year industry that’s only growing, with shops bringing in between 40 and 60 percent of total revenue for international airports.
In South Florida each spring, when 2,500 to 2,800 luxury-goods manufacturers and first- and second-order buyers and distributors gather for the Duty Free Show of the Americas, an annual event presented by the International Association of Airport Duty Free Stores (IAADFS). At the invitation of Michael Payne, IAADFS’s executive director and executive vice president at SmithBucklin, Convene attended this year’s show, which was held at the Orlando World Center Marriott on March 22–25.
What we found was a show floor that could have doubled as an airport terminal for A-list celebrities. The booths were stunning. Beluga Vodka created a skyscraper-like tower of bottles of its crystal-clear wares, while subtly lit jewelry cabinets stocked with all manner of pearl bracelets, earrings, necklaces, and rings lined the walls of Honora’s booth. Cross hired an artist to draw caricatures of attendees using the company’s high-end pens. Miami-based distributor Actium took a creative and minimalistic approach to its display area, evoking a museum gallery with specially commissioned paintings, drawings, and sculptures depicting products from its range of perfume, liquor, and fashion offerings.
The show also functions as a launch pad for new products. Michael Kors debuted its spring eyewear collection there this year, while Versace highlighted its new scent, Eros Pour Femme — an eau de parfum with lemon and jasmine top notes — and Japanese beauty powerhouse Shiseido unveiled its new Ultimune Powder Infusing Concentrate. Fraternity Spirits, a distribution company based in Mexico, poured out generous samples of Rives Pink Gin to celebrate the addition of the Spanish distillery’s product line to its portfolio.
“When you see wares displayed in duty-free airport settings, they tend to be housed in really nice, well-lit, attractive stores. And so our attendees are trying to mimic some of that in their exhibit areas,” Payne told Convene in an interview after the show. “I’ve seen this terrific improvement from, initially, a lot of 10-foot-by-10-foot setups to much more grandiose private meeting spaces, so that attendees can conduct the kind of business they want to conduct.”
FREE-TRADE ZONES
Attendees at this year’s Duty Free Show hailed from 60 countries, mirroring the spread of duty-free stores across the globe “[The show] was really founded for the North America, Mexico, Central America, South America, and Caribbean markets,” Payne said. “That was kind of the heyday of the Americas’ involvement. But with the internationalization of more companies, both operators and suppliers, you now have a large number of Europeans. There was a good contingent from the Middle East, in addition to the Americas’ representation. So the changing nature of the companies themselves has changed who’s attending in a very positive way.”
Because nearly two-thirds of attendees travel to the show from other countries, Payne’s team focuses on briefing members of each international contingent on specific visa requirements well in advance. The show’s on-site team includes French, Italian, and Spanish speakers, and the exhibitor directory is printed in both English and Spanish.
Several years ago, IAADFS streamlined pricing so international attendees wouldn’t be hit with surprise bills. “Our location in the U.S. — where you can ship a container from the U.K. for, say, $3,500 and then have to pay something like $4,000 to ship it from the dock to the booth space — was always a problem for us, given the size and weight of a lot of these international booths,” Payne said. “So we now enclose all of that into the floor-space rental fee, so there is no extra drayage charge for these people to move on and off the floor.”
BEYOND THE CALL OF DUTY
The Duty Free Show isn’t just about bling. A 3K “fun run” kicked off this year’s meeting, raising $10,000 for Escuela de la Calle (EDELAC), a Guatemalan organization dedicated to providing education and health care to child workers. Profits from the show itself are funneled into advocacy efforts, lobbying, and duty-free regulatory issues. “We had problems with seizure of products after the shoe bomber and other sort of scares, and things got very tight in terms of what you could take through,” Payne said.
Industry advocates first negotiated an arrangement between the United States, the European Union, Australia, and Canada under which passengers who had purchased duty-free items could change planes with their purchases as long as they were in tamper-evident bags. This led IAADFS and its partners in advocacy to take on larger issues, including the U.S. Transportation Security Administration’s three-ounce limit for transporting liquids and gels through airport security as well as duty-free purchasing limits that vary by a traveler’s country of origin and destination. Negotiations on those are still in progress.
This year’s show closed with a reception held in the Marriott’s Crystal Ballroom. The evening began with cocktails followed by a seated three-course dinner. After the servers cleared away dessert, the curtain lifted to reveal The British Invasion, a Beatles cover band that played some of the Fab Four’s greatest hits and had the crowd dancing in front of the stage. The gala was a fitting end to a show that was first-class all the way.
